Lawmaker: Terrestrial Radio Getting A 'Free Ride'

In an Op-Ed piece for The Hill, longtime NY Rep. Jerrold Nadler (D) says he favors revising performance royalty legislation.

According to Nadler:

"If Congress were to start with a blank sheet of paper, none of us would write the law the way it stands today. Thanks to special-interest exemptions, short-term reactions to changing technologies and congressional gridlock, the law that governs royalty payments is inconsistent and unfair, disadvantaging new technologies and massively shortchanging artists and musicians."

Nadler discusses Internet radio royalty rates, the ongoing legislation over pre-1972 recordings and the performance royalties for terrestrial radio, which he says, "gets a free ride and an advantage over its digital competitors."

"...terrestrial radio gets a free ride and an advantage over its digital competitors. Performing artists, background musicians and other rights holders of sound recordings receive absolutely no compensation when their music is played over the air on AM/FM radio. The bottom line is that terrestrial radio profits from the intellectual property of recording artists for free. Almost every other country compensates performing artists for radio play."

Nadler says that the Fair Play Fair Pay Act, which he co-introduced recently with Marsha Blackburn (R-TN) "to create a uniform system where radio services compete on a level playing field, and all performing artists are fairly compensated."

NAB EVP of Communications Dennis Wharton responded to Nadler's op-ed, telling FMQB, “NAB is pleased that a bipartisan group of 232 House members and 26 Senators oppose Rep. Nadler’s gift to offshore record labels at the expense of thousands of America’s hometown radio stations. Local radio airplay has launched and sustained the careers of countless artists, while scores of artists have sued record labels for non-payment of royalties. It’s disappointing that Rep. Nadler wants to punish the #1 promotional vehicle for the music industry – free and local radio.”

In his piece Nadler counters:

"Truly local broadcasters recognize that the Fair Play Fair Pay Act protects small, local and public broadcasters by capping terrestrial royalties at affordable rates. Stations with less than $1 million in annual revenue would pay $500 per year, noncommercial public radio stations would pay $100 a year, and religious and incidental uses of music would not have to pay any royalties at all. That’s right. Just $100 or $500 per year. That’s less than the cost of a trip to Washington to lobby against artists. The Fair Play Fair Pay Act is the true local radio freedom act. No longer will smaller broadcasters be used as pawns in an immoral fight."